Archives for Health Care Reform

New Rules and Penalties for Employer Premium Reimbursement

Posted by mnjinsurance on August 10, 2015

IRS Notice 2015-17: New Guidance for Employer Premium Reimbursement

In the past, many employers have helped employees pay for individual health insurance policies (i.e. through “Employer Payment Plans”) in the offering an employer-sponsored plan. In recent months, the Department of Labor (DOL), Health and Human Services (HHS), and Treasury Departments have released several pieces of guidance addressing these arrangements. According to this guidance, employer payment plans do not comply with several ACA provisions that took effect beginning in 2014. In May 2014 release from the IRS, violations of these rules can result in excess lines of $100 per day, per employee or $36,500 annually under section 4980D of the Internal Revenue Code.

 

Later, on February 18, 2015, the Internal Revenue Service issued Notice 2015–17. This Notice clarifies that increase in employee compensation does NOT constitute an employer payment plan, as long as the increases are not conditioned on the purchase of individual coverage; provides transitional relief from the excise tax for small employers through June 30, 2015 and to S-corporation healthcare arrangements for 2% shareholder employees; and addresses whether employers may reimburse employees for Medicare or TRICARE premiums for active employees under ACA. The DOL and HHS have reviewed the Notice and agree with the guidance provided.

 

What is an Employer Payment Plan?

 

An Employer Payment Plan is an arrangement through which an employer pays, directly or indirectly (i.e. including direct or indirect payments with after-tax dollars), and employee’s premiums for major medical coverage purchased and in the individual market (inside or outside the exchange), and/or Medicare Part B or D premiums. Employer Payment Plans violate one or more of the health insurance reform through the ACA (including the prohibition on annual dollar limits on essential health benefits and the requirement to provide preventive care without cost-sharing) and as such, excise taxes of up to $100 per day per employee would apply under Code Section 4980D. See IRS notice 2013–54 and Agency ACA FAQs XXII. The Notice also describes and clarifies the types of permissible arrangements that can be used for employers to reimburse Medicare Part B or D premiums or TRICARE expenses without running afoul of the health insurance reforms.

 

Temporary Transition Relief for Small Employers until June 30, 2015

 

The new Notice acknowledges this rule may be a challenge for smaller employers with 50 or fewer full-time equivalent employees for 2014 to comply with, and therefore, small employers will not be penalized for noncompliant premium payment plans that were in effect during 2014. According to Notice 2015–17, there is a delay in the excise tax penalty for employer some are not considered to be an applicable large employer. Small employers may require more time to implement alternative health coverage. This transition relief is temporary and small employers may be subject to the excise tax after June 30, 2015. In addition to waiving the penalty, the smaller employers will not be required to file the Form 8928 on which non-compliance is expected to be self-reported.

 

It is important to note, there is no relief for employers with 50 or more full-time equivalent employees, and they were required to begin compiling as of January 1, 2014.

 

S-Corporation healthcare arrangements for 2% shareholder employees

 

Under IRS Notice 2008-1, if a S-corporation pays for, or reimburses premiums for individual health insurance coverage during a 2% shareholder, the payment for reimbursement is included in income, and the 2% shareholder may deduct the amount of premiums, provided that all other eligibility criteria for deductibility are satisfied. Notice 2015–17 refers to this as “2% shareholder-employee healthcare arrangement.”

 

The Notice indicates that the agencies expect to issue additional guidance in the future regarding the application at the health insurance reforms to more than 2% shareholder arrangements. Although not addressed in the Notice, it would seem that similar relief maybe necessary for other self-employed individuals who are allowed to take a section 162(I) deduction for individual market health insurance, such as partners in a partnership. The Notice also indicates that the IRS and Treasury are considering whether additional guidance is needed regarding the federal tax treatment of health coverage provided to more than 2% shareholder employees. Until then, S-corporations and more than 2% shareholders may continue to rely on Notice 2008-1 with regard to tax treatment of these arrangements for all federal income and employment tax purposes.

 

Reimbursement of Medicare premiums

 

Notice 2015-17 indicates that certain employer payment plans that reimburse Medicare Part B and/or D premiums will be considered integrated with a group health plan for the purposes of the health insurance reforms, if the following conditions are satisfied:

 

  • The employer offers a group health plan, other than the employer payment plan, that provides minimum value coverage;
  •  The employee participating in the employer payment plan is actually enrolled in Medicare;
  •  The employer payment plan is available only to those who are enrolled in Medicare; and
  •  The employer payment plan limits reimbursement to Medicare Part B or part D premiums and excepted benefits, including Medigap premiums.

 

Employer should proceed with caution regarding this portion of the notice. While this arrangement may not be in conflict of healthcare reform is, it will violate Medicare Secondary Payer (MSP) rules, unless a small employer (under 20 employees) MSP exception applies.

 

TRICARE Arrangements

 

TRICARE is not considered an employer group health plan. As a result, such coverage cannot be integrated with an employer payment plan (such as plan reimbursing individual medical premiums). Notice 2015–17 provides a similar relief for HRA’s that reimbursed expenses incurred by employees covered by TRICARE.

 

TRICARE arrangements will be considered integrated with a group health plan for the purposes of healthcare reform, providing the following conditions are met:

 

  • The employer offers a group health plan, other than reimbursement arrangement, that provides minimum value;
  •  The employee participating in the reimbursement arrangement is actually enrolled in TRICARE;
  •  The reimbursement arrangement is available only to those who are enrolled in TRICARE; and
  •  The reimbursement arrangement limits reimbursement to cost share under TRICARE and excepted benefits, including TRICARE supplemental arrangement.

 

Similar to Medicare, TRICARE has strict coordination rules that make this type of arrangement illegal for employers subject to TRICARE coordination.

 

Call to Action for Employers:

 

Health Care Reform has made many changes to the insurance industry, and we are here to assist you with ensuring your groups compliance and Employee Benefit needs. With the new, additional guidance from the IRS, we recommend employers to do the following:

 

  • Evaluate your current policy and procedure regarding benefits;
  • Small employers that reimburse employees to pay directly for all or part of employee’s premiums for individual health coverage must change this practice and seek other options for group health insurance to avoid costly penalties for non-compliance.

 

If you have any questions or would like further clarification, MNJ insurance Solutions is here to assist you with your group health insurance needs and compliance.

 

More Information:

http://www.irs.gov/Affordable-Care-Act/Employer-Health-Care-Arrangements

IRS Notice 2013-54

IRS Notice 2015-17: Guidance on the Application of Code § 4980D to Certain Types of Health Coverage Reimbursement Arrangements

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

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U.S. Supreme Court Ruling: Subsidies Will Continue for Federal Marketplace Coverage

Posted by mnjinsurance on August 3, 2015

us supreme court

On June 25, 2015, the U.S. Supreme Court released their decision in the King v. Burwell case concerning the provision in the Patient Protection and Affordable Care Act (PPACA), and ruled that subsidies will continue to be available in all states and not just those with state-based exchanges.  Subsidies with federally-facilitated exchanges will continue, as the Obama administration intended.  The ruling affirmed the earlier decision by the Fourth Circuit Court of Appeals.

 

California has a state-based exchange, known as “Covered California,” and this decision does not affect things in California, but the clarification is important and applicable to the residents in the 34 states that utilize the Federal Marketplace.  Since nothing has changed as a result of this decision and NO ACTION is required by individuals who are currently receiving health insurance subsidies in California at this time.

 

The Court considered two possible scenarios in its decision:

  1. Adhere to the strict reading of the law that subsidies may only be available with state exchanges, OR
  2. rule in favor of the intent of the law for universal availability of subsidies in all states and all exchanged.

 

Following this ruling in favor of allowing premium subsidies to be distributed through both federal and state exchanges, the implementation of PPACA will continue and its insurance reform provision will remain in effect.

 

Since the continuity of subsidies, in both state and federal exchanges are no longer in question, it is our hope that legislation will make Health Care Reform more workable for both individual and business consumers.  In addition, it is our hope that sate and federal policymakers will not focus their attention on efforts to reduce the cost of providing health care, as PPACA has still not fully addressed the issue.  Lawmakers and regulators need to look at the portions of our health care system that are working well and keep a variety of health insurance products and options available to all consumers, and improve the areas that need adjustments.  We believe the employer-based system has been reliable and effectively delivered health coverage to generations of Americans, and as a nation, we need to preserve it!

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

Additional Medicare Tax for High Income Earners

Posted by mnjinsurance on August 3, 2015

medicare-tax-income-tax

 

For taxable years beginning after December 31, 2012, employers are required to withhold Additional Medicare Tax (at a rate of 0.9%) on wages or compensation paid to an employee in excess of $200,000 in a calendar year. Below are common questions and answers for individuals and employers regarding the tax increase. For additional information, please review the complete set of FAQs from the IRS.

 

Special Update: Effective November 29, 2013, final rules provide guidance for employers relating to the implementation of Additional Medicare Tax, including the employer process for adjusting underpayments and overpayments of the tax and for filing a claim for refund for an overpayment.

Frequently Asked Questions on Additional Medicare Taxes for High Income Earners

When did Additional Medicare Tax start?
Additional Medicare Tax went into effect in 2013 and applies to wages, compensation, and self-employment income above a threshold amount received in taxable years beginning after December 31, 2012.

 

What is the rate of Additional Medicare Tax?
The rate is 0.9 percent.

 

When are individuals liable for Additional Medicare Tax?
An individual is liable for Additional Medicare Tax if the individual’s wages, compensation, or self-employment income (together with that of his or her spouse if filing a joint return) exceed the threshold amount for the individual’s filing status:

Filing Status

Threshold Amount

Married Filing Jointly

$250,000

Married Filing Separately

$125,000

Single

$200,000

Head of Household (with qualifying person)

$200,000

Qualifying Widow(er) with dependent child

$200,000

 

What wages are subject to Additional Medicare Tax?
All wages that are currently subject to Medicare Tax are subject to Additional Medicare Tax if they are paid in excess of the applicable threshold for an individual’s filing status.

 

When must an employer withhold Additional Medicare Tax?
Effective January 1, 2013, an employer must withhold Additional Medicare Tax on wages it pays to an employee in excess of $200,000 in a calendar year. An employer has this withholding obligation even though an employee may not be liable for Additional Medicare Tax because, for example, the employee’s wages together with that of his or her spouse do not exceed the $250,000 threshold for joint return filers. Any withheld Additional Medicare Tax will be credited against the total tax liability shown on the individual’s income tax return (Form 1040).

 

Is an employer liable for Additional Medicare Tax even if it does not withhold it from an employee’s wages?
An employer that does not deduct and withhold Additional Medicare Tax as required is liable for the tax unless the tax that it failed to withhold from the employee’s wages is paid by the employee. An employer is not relieved of its liability for payment of any Additional Medicare Tax required to be withheld unless it can show that the tax has been paid by filing Forms 4669 and 4670. Even if not liable for the tax, an employer that does not meet its withholding, deposit, reporting, and payment responsibilities for Additional Medicare Tax may be subject to all applicable penalties.

 

Can an employee request additional withholding specifically for Additional Medicare Tax?
No. However, an employee who anticipates liability for Additional Medicare Tax may request that his or her employer withhold an additional amount of income tax withholding on Form W-4. This additional income tax withholding will be applied against all taxes shown on the individual’s income tax return (Form 1040), including any Additional Medicare Tax liability.

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

 

CA Waiting Period Update & Federal Changes on the Horizon: August 20, 2014

Posted by mnjinsurance on August 3, 2015

August 15, 2014 California Governor Jerry Brown signed into law legislation to better align California’s health coverage waiting period requirements with federal law. The intent of the bill is to resolve confusion between California and Federal law and to better conform to the waiting period provisions of the Affordable Care Act. While the ACA had established a 90-day waiting period for employers, California originally established a 60-day waiting period in 2014.

 

Therefore, as new plans begin or plans renew on or after January 1, 2015, employers will have the following options for waiting periods (depending on the medical carrier):

 

  1. First of the month following date of hire,
  2. First of the month following 30 days, or
  3. First of the month following 60 days.

 

Please check with your medical carrier for details or we can assist you to ensure you have the best option for your group.  If your group would like to change your waiting period for first of the month following 60 days, as your plan’s current waiting period was changed upon your renewal in 2014 to a lesser waiting period, this MAY be an option in 2015 (depending on carrier), or you can change upon your next renewal.

 

Federal action on waiting periods-in this case orientation periods – is also occurring at the federal level. In a final rule released in June 25, 2014 the Internal Revenue Service, the Employee Benefits Security Administration, and the Health and Human Services Department are authorizing an employer (who is offering ACA defined credible coverage) to have a “bona fide orientation period that occurs before the 90 waiting period begins. That means an employer that offers health coverage to employees could have an additional month of time before adding a new hire onto their health policy if there is a bona fide reason for an orientation period.

 

Under the final regulations, a group health plan and a health insurance issuer offering group health insurance coverage may not apply any waiting period that exceeds 90 days. The regulations define “waiting period” as the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective. Being otherwise eligible to enroll in a plan means having met the plan’s substantive eligibility conditions (such as, for example, being in an eligible job classification, achieving job-related licensure requirements specified in the plan’s terms, or satisfying a reasonable and bona fide employment-based orientation period.

 

The proposed regulations provided that one month would be the maximum allowed length of any reasonable and bona fide employment-based orientation period. During an orientation period, the regulators envisioned that an employer and employee could evaluate whether the employment situation was satisfactory for each party, and standard orientation and training processes would begin. Under the proposed regulations, if a group health plan conditions eligibility on an employee’s having completed a reasonable and bona fide employment-based orientation period, the eligibility condition would not be considered to be designed to avoid compliance with the 90-day waiting period limitation if the orientation period did not exceed one month and the maximum 90-day waiting period would begin on the first day after the orientation period.

 

The federal orientation period rule becomes effective on all group policies issued or renewed after January 1, 2015.

 

Click here for the Federal Register Notice.

 

Reference:  CAHU News Agents Can Use (August 20, 2014)

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

“To Grandmother or Not to Grandmother…That is the Question!”

Posted by mnjinsurance on August 3, 2015

Now that SB 1446, “Grandmothering” bill has been signed, it allows small employers (50 or fewer employees) with non-grandfathered health insurance policies in effect as of December 31, 2013, the option to renew their existing coverage for one year, rather than be required to move to 2014 ACA compliant plans.

Did you know that not all carriers are responding to “Grandmothering” the same way? Should you “Grandmother” your small group’s plan options, or are 2014 ACA plans lower in premium and a better fit for your group?   You can count on your MNJ Insurance Solutions Sales Team to inform you of the new law, compliance updates, how your client’s current carrier is or is not acknowledging “Grandmothering,” along with developing the right sales strategy for your company.

In order to prepare an analysis, we will need the following:

  1. Company Name, Company zip code, and SIC code,
  2. Census (include employee name, spouse’s name, children up to age 26 name, date of birth for covered members, and home zip codes),
  3. Copy of current plan design, current RAF (Risk Adjustment Factor), and rates, and
  4. Copy of renewal, renewal RAF and rates.

 

We are here to help explore these options with you, as we want to earn your business!

 

Do Not Delay…to Request a Quote Analysis or to learn more about MNJ Insurance Solutions Value-Added benefits, please contact us at (714) 716-4303.

 

Grandmothering Bill Signed (SB 1446): July 7, 2014

Posted by mnjinsurance on August 3, 2015

California Senate Bill 1446 (“SB 1446″) was signed by Governor Brown on July 7, 2014, to provide some small employers with non-grandfathered health insurance plans in effect as of December 31, 2013, the option to renew their existing coverage for one year, rather than be required to move to new ACA-compliant coverage by the end of 2014.    The employer is not eligible if they are enrolled in ACA compliant plans.  Grandfathered plans (plans that were in force prior to March 23, 2010) are NOT impacted by SB 1446.

 

The new law provides employers with 50 or fewer employees the ability to renew their small group health plan if the policy was in effect as of December 31, 2013, and still in force at the time SB 1446 was signed into law as of July 7, 2014.  Plans that meet this definition are now referred to as “Grandmothered” plans.  SB 1446 will permit these Grandmothered plans to continue to renew until January 1, 2015 and those policies to remain in force until December 31, 2015.  This change moves state law closer to recent federal policy changes, allowing for a longer transition period to ACA–compliant plans.  SB 1446 has an urgency measure, that provides the new law to take effect immediately after signing.

 

The small group policies affected by SB 1446 must still include many ACA and state-based mandated benefits, such as preventive healthcare coverage without copays or deductibles, no lifetime caps on benefits, maternity care, coverage for autism, and the elimination of gender discrimination in setting premiums.  The insurance carriers will be handling “Grandmothering” different, depending on their position they opt in the market.  Please refer to UpdatedCarriersGrandmotheringGuide_20140711B (1) (1) for more details.

 

The new law also requires insurers who offer “Grandmothered” plans for renew to provide notice to the group contract holder regarding the option to renew that states:

 

“New health care coverage options are available in California.  You currently have health care coverage that is not required to comply with many new laws.  A new health benefit plan may be more affordable and/or offer more comprehensive benefits.  New plans may also have limits on deductibles and out-of-pocket costs, while your existing plan may have no such limits.

 

You have the option to remain with your current coverage for one more year or switch to new coverage that complies with the new laws.  Covered California, the state’s new health insurance marketplace, offers small employers health insurance from a number of companies through tis Small Business Health Options Program (SHOP).  Federal tax credits are available through the SHOP to those small employers that qualify.  Talk to Covered California (1-877-453-9198), your plan representative, or your insurance agent to discuss your options.”

 

Please contact MNJ Insurance Solutions at (714) 716-4303 to discuss your group’s current plan and options.  We can evaluate Grandmothered plan options and rates, and compare them to the ACA-compatible plans to explore both options and rates.

 

Reference: CAHU News Agents can Use (July 7, 2014), “Grandmothering Bill Signed: Takes Immediate Effect”

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

 

Finding Creative Solutions to 2014 PPACA Mandates: “Early Renewal” Strategy for Small Groups

Posted by mnjinsurance on August 2, 2015

In addition to avoiding some of the changes in small group benefits, some insurers are advising their group clients to “Early renew” and have a new effective date of December 1, 2013, thereby avoiding the more expensive January 1, 0214 changes until later in 2014.  If a policy is renewed before January 1, 2014, this allows individuals to effectively postpose the impact of PPACA changes and rating.

 

Reasons to Consider a December 1, 2013 Effective Date (“Early Renewal”) Versus Waiting Until 2014

As a “Trusted Advisor,” we need to take a more strategic look at the Group Employee Benefits package, including plan design, ensuring the right networks of doctors and hospitals, calculating employer contribution, meeting participation requirements, and of course, providing affordable options that fit within the Employer and Employees’ budget.

 

Beginning January 1, 2014, all carriers have had to make changes to their plan portfolio options. For small group, the carriers had to ensure they included the 10 Essential Benefits, including pediatric dental and vision, were meeting a minimum actuarial value of 60%, 70%, 80%, 90%, and were required to significantly change the rating structure, just to name a few.

 

It is important to evaluate and market your benefits for either November 1, 2013 or December 1, 2013 for the following reasons:

  •  Lock in Q4 pre-community rated rates.
  • Evaluate if your client has the best, preferred RAF available. (The carriers are getting aggressive).
  • Access to current known plan options.
  • Buy more time to evaluate the impact of PPACA, including physician networks and hospitals, community rating/member level rating, and plan designs, as this is ALL changing in 2014.
  • And most IMPORTANT: Be proactive with your clients!

 

How Small Group Rating in 2014 and Beyond Differs from prior to ACA:

 

 

Rating 2013 2014 and Beyond
RAF .90 – 1.10 No longer available as plans renew on or after January 1, 2014.
Age Bands 7 different age bands Single year age bands, with the exception of those 0-20 years of age and 64+
Rate differentials between younger and older No Limit 3:1
Member level rating One rate for family, regardless of age or number of children (based on employee age band) Separate rates for employee, spouse, EACH child 21 or older, and rate for the oldest 3 children under the age of 21.
Rating areas in CA 9 19

 

Listed below is how the small group carriers in California are planning on handling early renewals as of May 3, 2013.   As you know, things may change, however, we will do our best to keep you informed.

  • Aetna: Employers will have the option of renewing in 2013 to postpose the date they need to comply with ACA.
  • Anthem Blue Cross:  will offer small groups the opportunity to purchase a new agreement and adjust their renewal cycle, allowing eligible small group employers to stay on a 2013 benefit plan until later in 2014.  Groups accepting this offer would have their medical renewal month adjusted to December 2013 and rates adjusted to correspond with the new renewal cycle.
  • California Choice: Groups with a renewal month of January through November 2013 may change their renewal effective date to December 1, 2013.
  • Health Net: Employers will have the option of renewing in December 2013 to postpose the date they need to comply with ACA.  Sharp: Details pending
  • United HealthCare: For groups renewing January-June 2014, they can request and early effective date. The group will need to complete a UHC Attestation Form and it must be submitted directly to UHC by June 15, 2013.

 

Information above is not a guarantee, and may be subject to change.  Please note: Different rules apply to large group (see Transitional Relief for more details).

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

Are You Compliant with your Required Model Notices?

Posted by mnjinsurance on August 2, 2015

Model Notices under Health Care Reform

The Affordable Care Act requires group health plans to provide a number of informational notices to employees and other individuals eligible for benefits under the plan.  Model notices that may be used to satisfy certain notice requirements are available from the U.S. Department of Labor.

 

Included is a list of Model Notices and documents that may be required:

 

Summary of Benefits and Coverage (SBC) and Uniform Glossary:   Group health plans and health insurance issuers offering group health insurance coverage are required to provide participants and beneficiaries a summary of benefits and coverage (SBC) containing specific information about the plan and coverage, as well as a Uniform Glossary of Terms commonly used in health insurance coverage, as several points during the enrollment process and upon request.  The following templates, instructions, and related materials are available for use in connection with coverage beginning before January 1, 2014:

 

Templates, Instructions, and Related Materials – Currently Applicable (SBCs Before 1/1/2017)

 

Templates, Instructions, and Related Materials – Proposed (SBCs On or After 1/1/2017)

 

Notice of Coverage Options (Health Insurance Exchange Notice): All employers covered by the Fair Labor Standards Act are required to provide each new full-or part-time employee a written notice with information about a Health Insurance Exchange (Marketplace).  There are two different Notices under this requirement, one notice is for employers who offer coverage, and the other notice is for employers who do NOT offer group coverage.  The initial distribution was required no later than October 1, 2013.  However, in addition to the initial distribution of the Coverage Option Notice, an employer is required to provide it at the time of hiring, within 14 days of the employee’s start date.  The notice may be distributed by first-class mail, or electronically if certain requirements are met.  Model language is available from the DOL:

 

 

 

 Notices listed below are categorized by the Grandfathered or Non-Grandfathered Status of your Health Plan.

 

If your Plan is Grandfathered, the following Health Plan Notices are required:

1.  Grandfathered Model Notice; en español

2.  Dependent to Age 26 Notice (Coverage for Adult Children); en español

3.  Patient Protection Model Notice; en español

4.  Lifetime Limits on Essential Health Benefits; en español

5.  Patient Protections Notice-Prohibition on Rescissions

6.  Internal Claims and Appeals and External Review Decisions

 

If your Plan is Non-Grandfathered, the above Health Plan Notices (#2-6 are required)

 

Finally, all Plans-Grandfathered and Non-Grandfathered alike-must also provide the following ERISA Notices:

  1. Summary Plan Description (SPD) – An Employer must provide the SPD to plan participants within 90 days of the participant enrolling in the plan.  An updated SPD must be furnished every 5 years if changes are made to SPD information or the plan is amended (otherwise, it must be furnished every 10 years).
  2. Summary of Material Modification (SMM) – Within 60 days of adoption of a material reduction in covered services or benefits (alternatively, notice may be provided with plan information that is furnished at regular intervals of not more than 90 days, if certain conditions are met).
  3. Plan Documents – Copies must be furnished within 30 days of a written request, and the plan administrator must make copies available for examination at its principal office (the DOL can also request any documents relating to the plan).
  4.  WWCRA_NoticeWomen’s Health & Cancer Rights Act (WHCRA) Notices – Upon enrollment in a plan that provides coverage for medical and surgical benefits related to a mastectomy, and annually thereafter.
  5. CHIP_Model_Notice(Children’s Health Insurance Program Reauthorization Act);
  6. HIPAA Notice (for self-insured plans) (Contact your agent for assistance);
  7. Medicare Part D Creditable Coverage Disclosure Notice or Non-Creditable Coverage Disclosure Notice – Annually prior to October 15th, upon request, and at various other times as required under the law.  An online disclosure to the Centers for Medicare & Medicaid Services (CMS) is also required annually, no later than 60 days from the beginning of a plan year, and at certain other times
  8. Mental_Health_Parity (Mental Health Parity Act) – Upon request for a plan offering medical/surgical benefits and mental health or substance use disorder benefits
  9. Michelle’s Law Notice – With any notice regarding a requirement for certification of student status under a plan that bases eligibility for coverage on student status (and that provides dependent coverage beyond age 26).
  10. Newborns’ and Mothers’ Health Protection Act Notice – must be included in the SPD for a plan providing maternity or newborn infant coverage.

 

 Other Helpful Documents:
Initial COBRA Model Notice (Updated for Healthcare Reform)
COBRA Model Election Notice | en español  (updated for Healthcare Reform)

 

 

Please contact MNJ Insurance Solutions at (714) 716-4303  if we can be of assistance in the delivery or explanation of this document library.

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

Employer’s Requirements for Summary of Benefits and Coverage (SBC)

Posted by mnjinsurance on August 2, 2015

summary_of_benefits_and_coverage_sbcGroup business – SBC distribution requirements

 

Under its final rule of the Patient Protection and Affordable Care Act, U.S. health insurers and group health plan providers must provide a summary of benefits and coverage (SBC) to participants and beneficiaries who are eligible to enroll or re-enroll in group health coverage through an open enrollment period. The SBC must be distributed on the first day of an open enrollment period that begins on or after September 23, 2012, or on the first day of the plan year on or after September 23, 2012, for special enrollees and those newly eligible for coverage.

NOTE: you can access the form forms discussed here in the other resources section below.

 

Listed below are the specifics on SBC distribution for Employers:

 

New group business, upon selection of the benefit plan:

 

  • Employers must provide the SBCs within seven (7) business days of a request for information related to a specific plan.

 

Renewals for Group business – basics of SBC distribution requirements:

 

  • The employer has seven (7) business days, starting the day they receive the benefit confirmation to issue an SBC.
  • The employer has seven (7) business days from the date the benefit selection is finalized to distribute to eligible employees and dependents.
  • If renewal benefits are submitted late, eligible employees and dependents must receive SBC no later than the renewal date.
  • When the renewal is automatic and renewal has not been issued at least thirty (30) days prior to the renewal date, then the SBC must be issued within seven(7) business days of the date the benefits were finalized.

 

Specifics of SBC distribution:

 

  • Must be provided any time requested by the group administrator,
  • Open enrollment period – Must be provided with open enrollment materials,
  • If the employer does not have an open enrollment period, SBCs must be provided at least thirty (30) days prior to the renewal date,
  • When the renewal is automatic and the renewal has not been issued at least thirty (30) days prior to the renewal date, then the SBC must be issued within seven (7) business days of the date the benefits are finalized,
  • SBCs must be provided any time it is requested by a member for plan years beginning on or after September 23, 2012, and
  • SBC must be distributed to new hire eligible employees after renewal dates, beginning in or after September 23, 2012.

 

Material modification (does not include switching carriers at renewal)

 

The proposed regulations clarify that if a group health plan or health insurer makes a mid-year material modification to coverage that affects the content of an SBC, the group health plan or health insurer is your must provide a 60-day advance notice to enrollees. However, the 60-day advance notice rule does not apply to modifications made at renewal/annual open enrollment. A “material modification” is the same as a material modification under ERISA Section 102 (any change to the coverage offered that independently or in conjunction with other contemporaneous changes would be considered by the typical plan participant to be an important change, including changes that enhance or reduce benefits, increase premiums or cost-sharing, or impose new referral requirements).

 

Uniform glossary of terms:

 

The proposed rules require that group health plans and health insurance insurance make a Uniform Glossary of Terms available to participants and beneficiaries. The Uniform Glossary may not be modified and must be provided in paper and electronic form on request by a participant or beneficiary within seven (7) days. (A paper version of the uniform glass right must be available on request).

 

The proposed rules includes a list of health-coverage related terms and medical terms that will need to appear in the Uniform Glossary, which in addition, must include other terms that the Secretary of HHS determines are important to define, so that Individuals and Employers may compare and understand the terms of coverage and medical benefits (including any exceptions to those benefits).

 

Penalties for noncompliance of SBC distribution:

 

Employers that sponsor group health plan should start working with your broker to compile the information necessary to meet the SBC requirements.

 

A group health plan or health insurance insurer that willfully fails to provide an SBC will be subject to a fine of up to $1000 per enrollee who does not receive the SBC.

 

Additional resources:  ACA SBC Regulations and Guidance

 Regulations and Guidance

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

Small Group Rating on New ACA Plans Beginning in 2014

Posted by mnjinsurance on August 1, 2015

 

The Affordable Care Act and new state laws great new rules for how small group health plan rates will be calculated in 2014 and beyond for small groups. These changes are different than how small group has been rated prior to ACA. For non-grandfathered small group plans, insurance must maintain a single risk pool for coverage in the small group market, and there will be no medical underwriting.

 

For grandfathered plans, rates in 2014 will be calculated using the same methodology used in 2013 (i.e. age bands, dependent coverage, etc.). For non-grandfathered plans, including “metal tier” plans available on and off-exchange, rates can vary based only on the following factors:

 

  • Standard age curve: this age curve expands the number of age bands from 7 to 40 5H bands, requires all ensures to use the same age curve, and limits the oldest adult rate to no more than three times the youngest adult rate (defining adults as 21 and older).
  • Family coverage: the cost of family coverage will be calculated by adding together the premium rate for each family member using the standard age curve. Insurance can charge no more than three oldest children under the age 21 per family. This approach to establishing family coverage is called the “member level rating,” as opposed to family to your rating, which is based on the employees age and family coverage category.
  • Geographic area: rates can be higher for people who live in areas with high medical costs. The number of geographic right areas in California will jump from 9 to 19 into thousand 14, and they must be standardized across the insurers. In 2015, small group plans in California will be rated based on employer ZIP Code, whereas in the past, rates for most curious were based on employee home ZIP Code.

 

Example: Family with six children

 Dad, age 55  Mom, age 52  Child, age 24  Child, age 20  Child, age 17  Child, age 14  Child, age 10  Child, age 5

 

Based on the medical plan selected, the new member level family rating would be calculated as follows:

Premium for dad, age 55, plus

Premium for mom, age 52, plus

Premium for child, age 24 (as family member’s age 21 and older are eight rated separately),

plus Premium for child, age 20,

plus Premium for child, age 17,

plus Premium for child, age 14 (as previously mentioned, insurance can charge for no more than the three oldest children under age 21 per family)

The additional children, age 10 and age 5, are not rated for this family’s premium.

Add each premium together and that is the new family rate under ACA for small groups.

 

NOTE: Birthday billing rates will adjust for age at contract renewal, along with the carriers trend increase for the small risk pool.

NOTE:  As of January 1, 2016, small group rating will be for group sizes of 1-100, which will significantly change the 51-100 mid-sized employer’s rating and benefit offerings.

 

For more information, download Final Rule on Rate Review

 

 

MNJ insurance solutions can offer you affordable healthcare coverage for California employer groups of any size you still free to contact us for a complementary quote from various insurance carriers at 714-716-4303.

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.